Forex Trading – What It Is & How You Can Profit From It

In case you haven’t heard…trading Forex can be a very lucrative hobby or profession.

In fact, the Forex market is a TRILLION dollar industry.

We cover basic to advanced techniques and strategies to help you master the market.

What Is Forex?

To understand what Forex trading is, you have to understand what the Forex exchange market is. The Forex exchange market can be defined as the “place” where different foreign currencies are exchanged.

The Forex exchange market is important because it facilitates international trade. The need to constantly exchange currencies is the main reason why the Forex exchange market is the biggest most liquid financial market in the world.

According to the latest statistics from the BIS (Bank for International Settlements), the Forex market has a daily turnover of $4.9 trillion. This makes the Forex exchange market the biggest financial market in the world.

It is worth noting that the Forex market doesn’t have centralized marketplaces like stock markets. Forex trading takes place electronically. The process of trading in the Forex exchange market is referred to as Forex or currency trading.

Forex trading is the buying and selling of financial instruments (currency pairs) in the Forex exchange market. Forex trading takes place via computer networks which connect traders from all over the world. Forex traders can trade 24 hours 5 days a week.

The main financial centres for Forex trading include; London, Tokyo, New York, Frankfurt, Zurich, Singapore, Hong Kong, Sydney and Paris. The financial centres are basically across all time zones.

This explains why the Forex market is active 24 hours a day 5 days a week. When the trading day in the U.S. ends, another Forex trading day begins in Hong Kong and Tokyo. Because of this, the Forex market is extremely volatile with price quotes changing constantly.

Why Trading Forex Can Be Lucrative

There are very many reasons why Forex trading can be lucrative. Some of the most common reasons include:

It Is A 24 Hour Market

Unlike other markets (i.e. stock markets), the Forex market isn’t confined to working hours only. As mentioned above, the main financial centers for Forex trading are scattered everywhere in the world across all time zones.

This enables Forex traders to trade from Monday to Friday non-stop which has a number of benefits. For instance, a 24 hour market means there are more opportunities to make money.

Forex traders have the opportunity to make money day and night throughout the week. There is no other market that offers such money making opportunities.

Market Liquidity

Forex trading can be very lucrative because the Forex market is very liquid. As mentioned above, $4.9 trillion changes hands everyday in the Forex market.

All the other financial markets combined can’t be as liquid as the Forex market. High liquidity offers Forex traders very many lucrative opportunities to make quick profits because currency pair prices keep fluctuating.

You can make a lot of money in a few seconds. Such liquidity is unheard of in other financial markets.

Get Started With Little Money

As mentioned above, you just need a computer and an internet connection to start trading.

You can start trading live with as little as $100 and make way more if you know what you are doing.

It doesn’t get more lucrative than this. There are very few opportunities like Forex trading where you just need $100 to start with the possibility of earning $100 or more in a very short time.

Anyone Can Do It

Forex trading can also be lucrative because anyone can do it. You just need to be willing to learn.

Although Forex trading looks complicated to most people, it’s just a matter of learning and acquiring practical experience to be able to predict accurately whether a currency pair will rise or fall.

You don’t need a college degree or any kind of compulsory training to become a Forex trader. This makes Forex trading very lucrative to anyone who is interested.

Leverage

The Forex market can also be lucrative because of the potential to earn money using very little money (leverage).

Leverage in Forex trading allows trader to take trades with more money than they have in their Forex trading accounts.

For instance, traders with Forex accounts with $1,000 can take trading positions worth $100,000 which represents 100:1 leverage.

This gives them an opportunity to earn more than they have in their trading accounts if their trades go the right way. Although leverage is a risky concept, it is equally rewarding. It is in fact one of the main reasons why Forex trading is a very lucrative business.

Comfortable & Fast

Forex traders don’t have to work in traditional offices. In fact, most retail Forex traders trade from home. This offers them comfort they can’t get working in traditional offices. Trading from home also eliminates unnecessary costs associated with having a traditional job.

Forex trading is also fast. Because the Forex market is extremely liquid, traders have an opportunity to make fast cash. Most traders have time to get a second and third job because they don’t need to be tied down all day.

Why It’s Important To Have A Forex Trading Strategy?

From the above information, Forex trading can obviously be very lucrative. It is however important to note that you need a Forex trading strategy for you to be able to reap all the benefits Forex trading has to offer.

Below are some of the main reasons why a Forex trading strategy is crucial.

It Gives You Clear Trading Direction

Forex trading strategies tell traders exactly when to get in and out of the Forex market.

This helps traders avoid high risk behavior which can lead to heavy losses.

Although Forex traders are at liberty to trade anytime, trading without a purpose often leads to losses.

Eliminates Emotions

It is impossible to be a successful Forex trader if your decisions are guided by emotions like greed and fear.

Forex trading strategies come in handy because they eliminate such emotions completely from a trader’s vocabulary enabling him to see things more clearly i.e. get in and out of trades as planned.

It Helps You Avoid Margin Calls

Forex trading is regarded as one of the most high risk investments because you can lose all your money in seconds in cases of a margin call or trading without a stop loss.

A good Forex trading strategy balances the risk-reward ratio enabling you to protect your trading account at all time.

If you are interested in learning more about Forex, be sure to check out our information on various strategies, software, and more that can help you reach your monetary goals faster.

Also, check out our Free Forex Training Guide that is packed with invaluable basics along with a special Free Bonus that can put you on the fast track to success!